RE: Gas Storage10 Jan 2023 14:27
"Whereas governments on the continent mandate storage, Centrica is looking for moments when futures prices mean that any gas it injects into Rough can be sold forward to lock in a decent return straightaway. It managed to do that last year, with Rough full to about 60 per cent of its reduced capacity at the beginning of December. But recent prices don’t cover operating costs plus the required return, said Investec’s Martin Young.
No one thinks storage operated on this basis will provide security of supply. Indeed, part of the reason for Rough’s closure was that the difference between prices in summer and winter shrank as the global LNG market developed, undermining the model. And sure, the UK didn’t have the same reliance on Russian piped gas as did other countries such as Germany. But the country’s basic bet that international markets would always provide the necessary supplies at a reasonable price, looks questionable if not reckless after the past year."